Edited version of private ruling

Authorisation Number: 1011611395042

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Ruling

Is the income you receive from your employment with company A in country X assessable in Australia?

No.

This ruling applies for the following periods:

Year ended 30 June 2010

Year ended 30 June 2011

The scheme commences on:

1 July 2005

Relevant facts and circumstances

You are presently employed by company A in country X.

You have been employed by that company for over four years.

You work on a rotating roster of six weeks on and six weeks off.

All work in relation to your employment with company A is performed in country X.

From 2001 to 2006 you were employed by company B in Country X.

You are an Australian citizen.

You hold a country X visa which allows you to reside in country X and do business there.

Although you spend more time in country X than Australia, you have not obtained country X citizenship and it is rare for a non-national to adopt country X citizenship.

In the income year ended 30 June 2010 you spent 216 days in country X.

You expect to spend a similar amount of time in country X during the current financial year.

Since 2001 you have spent over 60% of your time in country X.

Your spouse is a permanent resident of Australia.

Your child is an Australian citizen.

Your spouse and child reside in Australia during school terms, for the purpose of allowing your child to attend school.

You have purchased properties both in country X and in Australia.

You purchased the property in country X with your funds, but the property is held in your spouse's name due to difficulties associated with foreign ownership in country X at the time of purchase.

You reside in the country X property whilst working in country X.

You spouse and child reside in the Australian property at which you also stay when you return to Australia to visit them.

Outside of school terms your spouse and child generally reside with you in country X whilst you are working.

You are not a member of a Commonwealth Superannuation Scheme.

You have supplied information from the Revenue Department of country X that states that a "resident" means any person residing in country X for a period or periods aggregating more than 180 days in any tax (calendar) year.

You state that you are a resident of country X pursuant to an Article of the country X Agreement.

There is a tax treaty between Australia and country X.

Ties with Australia

Your parent and sibling live in Australia.

You see your parent approximately six to eight times a year and your sibling approximately four times a year.

You maintain social friends in Australia.

You are not a member of a gym in Australia.

When you are in Australia you occasionally play a sport with friends.

You have a family membership at a sports club at which you play approximately twice a week when in Australia.

There are no regular social occasions organised while you are in Australia.

You and your spouse have shares and bank accounts in Australia.

Ties with country X

All your in-laws reside in country X.

You see your mother in law approximately 50 times per year and your sister in law approximately 25 times per year.

You maintain social and working friends in country X.

You are a member of a gym in country X.

You play a sport with your company once a week when in country X.

You play a sport once a fortnight when you are in country X.

You do not have regular dental or health check ups in Australia.

You have dental checkups and a yearly medical check-up in country X.

In the event of your death it is likely that your spouse and child would reside in country X.

You have a bank account in country X.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 6-5

Income Tax Assessment Act 1997 Subsection 6-5(2)

International Tax Agreements Act 1953 Section 4

Reasons for decision

Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for tax purposes, your assessable income includes ordinary income derived from all sources, whether inside or outside of Australia.

Salary and wages are ordinary income for the purpose of subsection 6-5(2) of the ITAA 1997.

To determine whether the income you receive as a consequence of your employment with company A in country X is assessable in Australia, we must first determine your residency status.

As you state that you are a resident of country X, it is necessary to consider any applicable tax treaty contained in the International Tax Agreements Act 1953 (Agreements Act).

Section 4 of the Agreements Act incorporates that Act with the ITAA 1997 so that those Acts are read as one.

A Schedule to the Agreements Act contains the tax treaty between Australia and country X (the country X Agreement). The country X Agreement operates to avoid the double taxation of income received by Australia and country X residents.

An Article of the country X Agreement provides that a person's residency status for the purpose of applying the country X Agreement shall be determined as follows:

· the person shall be deemed to be a resident of the country in which a permanent home is available to the person

· if the person has a permanent home in both countries, or in neither of them, the person shall be deemed a resident of the country in which the person has a habitual abode

· if the person has a habitual abode in both countries, or in neither of them, the person shall be deemed to be a resident of the country with which the person's personal and economic relations are closer.

In your case, you have a permanent home available to you in both Australia and country X. You consider your habitual abode to be your residence in country X as this is the residence you reside in most often and it is also the home where your family spends a significant portion of time and it is the abode from which you work.

Residency status

In your case:

· you have been employed in country X since 2001 and the majority of the time has been spent in country X

· you own property in country X

· you have a bank account in country X

· you have more contact with your relatives in country X

· your dental and medical requirements are dealt with in country X.

Therefore, it is considered that your personal and economic relations are closer with country X. Accordingly, as you are a foreign (non) resident of Australia, the income you derive from your employment with company A in country X is not assessable in Australia under section 6-5 of the ITAA 1997.